Saudi Arabia to provide $3 billion to Pakistan to help avoid payment crisis

Imran Khan attended a Saudi Arabian investment conference where the Pakistani leader virtually begged potential investors as Pakistan continues to seek funding to plug its deteriorating finances. The summit, nicknamed “Davos in the desert”, though got overshadowed by growing global outrage over the murder of journalist and Saudi government critic Jamal Khashoggi.

Khan had no choice but to attend the FII even as leading policy-makers and corporate chiefs shunned the conference in response to the death of Khashoggi at the Saudi consulate in Istanbul — a scandal that has tipped Riyadh into a diplomatic crisis.

Since taking power in August Khan has been seeking loans from allies such as China and Saudi Arabia, promised to recover funds stolen by corrupt officials, and embarked on a series of high-profile populist austerity measures.

Saudi Arabia on Tuesday pledged $3 billion to Pakistan as the South Asian country battles a balance of payment crisis, a statement from Islamabad said. It also agreed to provide up to another $3 billion on deferred payment for import of oil, the statement added. The agreement came between the two countries during a visit by Prime Minister Imran Khan to Riyadh where he met King Salman bin Abdulaziz.

The two countries “agreed Saudi Arabia will place a deposit of $3 Billion for a period of one year as balance of payment support”, said the statement.0 ‘ll

“It was also agreed that a one year deferred payment facility for import of oil, up to $3 billion, will be provided by Saudi Arabia.

“This arrangement will be in place for three years, which will be reviewed thereafter.”

During his address at the troubled Future Investment Initiative (FII) in Riyadh, Khan confirmed that Pakistan was also in talks with the International Monetary Fund (IMF) over a new bailout.

But help has been in short supply and economists’ warnings have grown increasingly urgent.

The Saudi pledge comes days after Pakistan’s central bank warned inflation could double in the coming year — hitting 7.5 percent — while the country’s growth target rate of 6.2 percent would likely be missed.